Morningstar OBSR downgrades Thames River MM funds

Morningstar OBSR has downgraded the five-strong Thames River multi-manager suite run by Gary Potter (pictured) and Rob Burdett to Bronze.

The five funds - Balanced Managed, Cautious Managed, Distribution, Equity Managed and Global Boutiques - were previously rated Silver.

“While Morningstar OBSR acknowledges the experience and strength of the Thames River team and the consistency of their investment process, the funds’ return profile has become less compelling relative to peers,” it said.

“The volatile and macro-driven market conditions of the past few years have been challenging and Morningstar OBSR thinks the team’s main strength is in fund selection rather than asset allocation.

“Morningstar OBSR believes a Bronze Rating is a better reflection of its conviction in the above funds at the current time.”

The multi-manager duo spoke out in February to Investment Adviser to reassure investors after a three-year slump.

At the time, the duo’s Cautious, Balanced, Equity Managed and Global Boutiques funds all ranked in the bottom quartile in terms of performance over three years, according to Morningstar.

Only their largest fund, the £562.9m Distribution fund, had outperformed its peer group average, ranking second quartile in the three years to February 9.

The low-point in relative returns came after the managers’ outperformance in 2008 dropped out of the funds’ three-year data.